The Trust Layer for Market Analysts

The iShares 20+ Year Treasury Bond ETF (TLT) is currently in a prolonged downtrend, depicted by a descending trend channel. The price has tested the lower boundary of this channel multiple times since October 2023. A key level to watch is 85.30, representing a 1% threshold below the 86.16 short-term resistance. While the TLT has not yet closed decisively below the long-term trend line, a significant breach below 85.30 would signal a potential sell-off. Historical data suggests that a 16.5% move in TLT typically corresponds to a 1-1.25% shift in long-term interest rates. The current analysis anticipates a continued downtrend, targeting the 74.43 level, with a further potential to reach 70.14 in the next 3-5 months, which represents a significant drop below the 84.00 mark. The failure bound for this bearish outlook is set at 85.30, a level at which the thesis would be invalidated, possibly leading to range-bound trading or a reversal. The observed trend suggests that interest rates are expected to rise, putting downward pressure on long-duration bonds.